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FOREX-Dollar falls on CPI miss, signs of U.S.-China trade reset
Published at 13/09/2018 at 15:58

* Dollar index falls to 1-1/2-month low, breaks 100-day MA

* Euro rises to 2-week peak vs dollar amid hopes for Brexit deal

* Traders see Fed rate hikes despite CPI rising less than forecast

* ECB, BOE leave rates changed; Turkey cenbank uncorks rate hike

* Graphic: World FX rates in 2018

(Updates market action, changes dateline, previous LONDON)

By Richard Leong

NEW YORK, Sept 13 (Reuters) - The dollar fell to a near 1-1/2-month low against a group of currencies on Thursday after data showed U.S. consumer prices increased less than expected in August, paring traders' outlook that domestic inflation is accelerating.

Signs of reduced trade tensions between China and the United States after Washington reached out to Beijing on Wednesday to restart trade talks also pressured the greenback.

"The safe-haven demand for the dollar has diminished the past two days on positive trade developments between U.S. and China," said Peter Ng, senior currency trader at Silicon Valley Bank in Santa Clara, California. "Today's CPI miss has added downward pressure on the dollar."

The U.S. Labor Department said its Consumer Price Index, the government's broadest inflation gauge, rose 0.2 percent in August, less than the 0.3 percent increase projected by analysts polled by Reuters.

Despite the CPI miss, traders did not change their view the Federal Reserve would raise key short-term interest rates by a quarter point to 2.00 percent-2.25 percent at its policy meeting in two weeks. They also anticipated the Fed would increase rates for a fourth time this year in December.

An index that tracks the dollar against six major rivals

hit a near six-week low at 94.428. At 10:40 a.m. (1440 GMT), it was down 0.19 percent at 94.623.

The greenback weakened for a fourth straight day against the euro and sterling on hopes that Britain and the European Union would hammer out trade terms before the Britain leaves the economic bloc next March.

The common currency rose to a two-week peak against the dollar at $1.17010 before subsiding to $1.16780, up 0.44 percent on the day, EBS data showed.

The pound hit a six-week high versus the dollar at $1.3124. It was last at $1.3095, up 0.36 percent.

The European Central Bank and Bank of England as expected left interest rates unchanged on Thursday.

The ECB signaled it was on track to dial back its bond purchases later this year, while the BOE highlighted concerns from Brexit.

Turkey's central bank raised its benchmark rate by 625 basis points on Thursday in a bid to shore up the lira and soothe investor concern about President Tayyip Erdogan's influence on monetary policy.

Turkey's lira rallied 2.6 percent at 66.1800 per dollar

. It had slumped to a record low of 7.2400 in mid-August, raising investor expectations for the central bank to tighten monetary policy and arrest the currency's slide. ========================================================

Currency bid prices at 10:40AM (1440 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change


Euro/Dollar EUR= $1.1675 $1.1624 +0.44% +0.00% +1.1701 +1.1609

Dollar/Yen JPY= 111.8500 111.2500 +0.54% +0.00% +111.9100 +111.1700

Euro/Yen EURJPY= 130.60 129.34 +0.97% +0.00% +130.8000 +129.2700

Dollar/Swiss CHF= 0.9675 0.9704 -0.30% +0.00% +0.9708 +0.9659

Sterling/Dollar GBP= 1.3094 1.3046 +0.37% +0.00% +1.3121 +1.3027

Dollar/Canadian CAD= 1.3022 1.2995 +0.21% +0.00% +1.3025 +1.2975

Australian/Doll AUD= 0.7200 0.7168 +0.45% +0.00% +0.7229 +0.7166


Euro/Swiss EURCHF= 1.1296 1.1284 +0.11% +0.00% +1.1316 +1.1263

Euro/Sterling EURGBP= 0.8916 0.8911 +0.06% +0.00% +0.8931 +0.8894

NZ Dollar/Dolar NZD= 0.6564 0.6562 +0.03% +0.00% +0.6589 +0.6544

Dollar/Norway NOK= 8.2225 8.2579 -0.43% +0.00% +8.2642 +8.1954

Euro/Norway EURNOK= 9.6015 9.6012 +0.00% +0.00% +9.6075 +9.5642

Dollar/Sweden SEK= 8.9490 8.9798 +0.10% +0.00% +8.9947 +8.9290

Euro/Sweden EURSEK= 10.4502 10.4400 +0.10% +0.00% +10.4603 +10.4319

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Europe Positions and Surprise


(Additional reporting by Saikat Chatterjee in LONDON, Shinichi Saoshiro in TOKYO; Editing by Meredith Mazzilli)

((; +1 646 223 6313; Reuters Messaging:; Twitter @RichardLeong2))